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Five Things You Need to Know: Sensex Retreats, European Inflation, What Can Brown Do For You?, Dollar Falls, Xbox Financing


What you need to know (and what it means)!


Minyanville's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Sensex Retreats

Just two trading days after hitting a record high of 14,028.47, India's Sensex Index has recorded back-to-back losses totalling more than a 1,000 points.

  • The Sensex on Monday recorded its largest loss since June 13, falling 400 points to close at 13,399.43.
  • The Sensex settled 414 points lower on June 13 at 9062.65 points, but by Dec. 8 had gained well over 60%... until Monday's session.
  • Last night the Sensex ffell another 3% to close below 13,000 for the first time since Oct. 27.
  • On May 10 the Sensex peaked at 12,612 but gave back more than 2,000 points in the next 8 sessions, coinciding with a rocky period for stocks in the U.S.
  • At the time the move was blamed largely on Japanese speculators removing money from the market with fear the yen carry trade was unraveling.
  • The Reserve Bank of India on Friday asked banks to set aside cash equivalent to 5.5% of deposits from January 6, up from 5% now.
  • The measure is aimed at curbing money supply and slowing inflation, the central bank said.

2. European Inflation

Britain's inflation rate rose to the highest in at least nine years in November.

  • Britain's inflation rate rose to the highest in at least nine years in November, increasing speculation that the Bank of England will lift interest rates next year, according to Bloomberg.
  • Consumer prices rose 2.7 percent from a year earlier, the most since the index was introduced in January 1997, after a 2.4 percent gain in October, the article said.
  • Economists had expected an increase to 2.6 percent.
  • The Bank of England fears wage pressures as retail-price inflation accelerated to 3.9 percent in November from 3.7 percent in October.
  • Wage negotiators use the retail-price index in pay talks, Bloomberg said.

3. What Can Brown Do for You?

How about a severance package, or a forced layoff?

UPS (UPS) said Monday it is seeking more job cuts on top of 1,200 positions in its logistics unit it previously said it would cut, the Associated Press reported.

  • The company has offered voluntary severance packages to roughly 650 employees at its headquarters and in its Supply Chain Solutions division in the United States, the AP reported.
  • The cuts are in addition to the 1,200 jobs UPS announced in October that it would shed in its Supply Chain Solutions business, which handles air freight and logistics services.
  • UPS has been undergoing a restructuring meant to reduce costs and align transportation services and planning across the company.
  • The company is closely watched as an economic leader, especially around the holiday season.
  • On Dec. 20, expected to be the peak shipping day, UPS will deliver an estimated 240 packages a second, the New York Times reported in a weekend interview with UPS chairman and chief executive Michael Eskew.

4. I've Fallen and I Can't Get Up

The dollar slipped lower yesterday after former U.S. Federal Reserve Chairman Alan Greenspan said the U.S. currency would probably keep dropping.

  • The dollar, which has fallen three of the past four years, is year-to-date down 10.5% versus the euro.
  • Speaking from Washington by satellite to a business conference in Tel Aviv, former Federal Reserve Chairman Alan Greenspan said, "I expect that the dollar will continue to drift downward."
  • Greenspan said the dollar's decline will likely continue due to the ongoing massive current account deficit and, "Oh yeah, also, all that stuff I did back when I was Fed chairman."
  • Unfortunately, LifeCall can't save us from this fall.

5. I'd Like to Refinance My Xbox Please

A bank in India is offering to finance the purchase of an Xbox 360 for cash-strapped Indian gamers, InformationWeek reported.

  • Although India remains a key source of labor for American tech companies, high-tech products such as the Microsoft Xbox 360 which are manufactured there remain out of financial reach for most of the nation.
  • The average annual income in India is $500 USD.
  • Now, India's ICICI bank says customers can buy an Xbox 360 Core system for an upfront payment of $20 USD and six monthly installments of about $73 USD, InformationWeek reported.
  • The Xbox 360 Core system ordinarily sells in India for about $518 USD.
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